Review of deal with IMF and economic challenges.

• Author: Kazmi, S. Kamal Hayder
• Position: International Monetary Fund

Byline: S. Kamal Hayder Kazmi

Present statistics showed that Pakistan's economy faces tough challenges in this global environment and still has been struggling since previous year with spiraling fiscal deficit and current account, and steepening inflation rate in the previous 3-month. The economists also recorded that the large trade deficit has prompted officials to devalue the Pakistani rupee (PKR) by as much as 24 percent in the last year. In March 2019, the State Bank of Pakistan (SBP) revised its Gross Domestic Product (GDP) growth target down to a sluggish 3.5 percent, from the original target of approximately 6 percent. In April 2019, Pakistan Bureau of Statistics (PBS) recorded that the consumer price inflation (CPI) reached at 8.8 percent, up from nearly 3.8 percent at the corresponding period previous year.

To boost the economy of the country, the present Government of Pakistan and International Monetary Fund (IMF) have agreed on terms for a $6 billion bailout package, to be disbursed over a span of greater than 3-years, bringing an end to months of negotiations with the international lender.

The agreement was confirmed through IMF which added that the funds will be disbursed over 39 months. But under its terms, sources mentioned that its currency would have to be devalued against the dollar, and gas and electricity prices will rise as well. Unluckily, statistics revealed that our country is facing a challenging economic environment, with lackluster growth, high inflation, high indebtedness, and a weak external position. This reflects the legacy of uneven and procyclical economic strategies in present years aiming to increase growth, but at the expense of growing vulnerabilities and lingering structural and institutional weaknesses.

International economic experts recorded that the economies basically are focusing to understand and determine the indicators of economic growth. Various indicators affect the economic growth they recorded, whereas the developing states have to face out not only the impact of their own policies on economy but also the affect and dictatorship of states or fi, nancial institutions, offering borrowing and investment in such states. The experts also recorded that yet borrowing has to be done to finance public expenditure and for the social welfare of the economy. The developing states such as Pakistan have huge pressure of bad policies implemented through the financial aid of IMF. The present IMF's program...